A Complete Guide on Retail Execution in Merchandising Industry

What is Retail Execution?

Retail execution refers to any and all actions that take a brand to reach the final stage of the buyer's journey: purchase. Your retail execution strategy is directly linked to your sales success.

For example, a display can increase CPG sales by an average of 193% if executed according to the display plan. But, despite the huge reversal of these promotions - not to mention the investment they have taken from the brands - less than half of all performances are planned. This may be due to several factors such as failed retailer compliance, overstocks or out-stock, and poor planning.

The Different Aspects of Retail Execution

1)Merchandising

Merchandising takes into account how your products are exposed to consumers as they interact with them in a retail setting, and applies certain techniques to make those interactions as effective as possible.This may include activities by both marketing and sales, such as organizing shelves, setting up promotional displays, and tracking the results of business efforts. Having a strong understanding of product merchandising, how to execute it, and how it affects your business is essential for growth.

2)Retailer Negotiations

A major part of successfully executing in retail is negotiating with retailers for shelf space. Your retailer talks cover everything from winning shelf space to setting order sizes, pricing and promotions. As we will discuss later, maintaining strong retailer relationships is key to winning during negotiations.

3)Data Analytics

It is one thing to track data, and another to analyze it. Data analytics help brands take the data they are collecting in retail and analyze it and turn spotting trends into useful information. Understand it this way: data are different points on a graph. Analytics is an insight gained from studying that graph.

Once you analyze your data and gather your insights, the next step is to plug that information into a cycle of continuous improvement that will help develop your brand.This cycle empowers brands to take the insights they have exposed and use them at the planning stage to take data-driven action in the field. These three components - insight, planning, and action - are the ones that make up the cycle. See our post on the benefits of data-driven retail execution to learn more.

Know the Retail Execution Best Practices

Below, we've listed five of the ten best practices for retail execution found in our best practices to build your retail presence. For more detailed descriptions and how to use best practices through ten, be sure to download the full best practices guide! You can check our retail store audit webinar to go even deeper when planning a retail execution strategy. 

Understand Retailer Relationships for Selling Products

Retailers deliver your product to the public, but remember: these stores carry a product. That product is shelf space. This is why having a strong relationship with your retailers is a key component of successful retail execution. Strong relationships will give you an advantage when negotiating for more shelf space.

Since retailers charge businesses based on the amount of space on their shelf, bringing high returns is critical to the success of your brand. An important step before jumping into a shelf space competition is to search for a patent attorney. If a product or its design is unique and has not yet been trademarked, it can be very easy for large retailers to only take ideas that work well in their locations. Be sure to cover your base on the legal front first.

Another way to prepare for negotiation with retailers is to join GS1 US. This non-profit company is a requirement for any business that wants their product in retail locations as they supply the portion of UPC found on unique products.

The UPC code is only one factor when considering costs.

Bringing the product to retail. Shipping, packaging, and returns (if the cost of the trade is on the return plan) should all be considered before negotiating with a retailer. The more research and preparations that bring suppliers to the table, the more benefit they will have against retailers in negotiations.

Build a Support Plan

For the same reason that bringing high returns to retailers is a negotiation benefit, a clear plan for how to create product demand is a sure way to show retailers that they are not wasting their time on your product. This includes how the business will avoid stock problems such as shortages or product returns.

Setting up a system for regular maintenance of product performance and stocking helps reassure retailers, and they realize that the business is committed to their outlets. A team of field representatives who act as merchants can be sure of what every performance really looks like.

Create Killer Packaging

An often underestimated aspect of the retailing process is product packaging. Along with bringing a business to market, intense consideration must be given to what will be most attractive to the audience. Not only is packaging important to attract the attention of potential customers, but retailers should also not stock products with boring and plain packaging. A major contribution to consumer decision making has to do with visualization. Make the packaging and get outside opinions before sending it to the press.

PPMS Field Marketing Services has expertise in product merchandising varying across industries like Telecom, Technology, Consumer Durables, FMCG, Mobility, Beverages, and more.